Real ADR

by Richard Alderman

For several decades, alternative dispute resolution (ADR) has been viewed as the savior of the American civil justice system.  ADR is viewed as providing a voluntary, cheaper, quicker, and more efficient alternative to our slow, expensive justice system.

Like most, I support the notion of ADR.  How can anyone argue with an alternative system that is cheaper, quicker and more efficient?  I have long had problems, however, with what currently passes for ADR. Arbitration, especially in the context of consumers, is fast becoming the norm, rather than an alternative, and it is anything but voluntary or cheaper, not to mention the problems of unfairness and the elimination of precedent and stare decisis.  Mediation, while better in theory, is often used only late in the civil justice process and simply adds another expense and formal process.  When I graduated from law school, we were told most cases settle “on the courthouse steps.”  Today, students are told they settle in formal mediation, and that your client must pay the fees of the mediator.

This is not to say I don’t support an alternative way of resolving disputes. In fact, I think arbitration, when truly voluntarily agreed to, can be an excellent forum, and mediation, if pursed early in the litigation process, can often result in a prompt settlement, without much of the cost and hostility of litigation.

Perhaps we should be thinking outside of the box when it comes to consumer ADR.  For example, how about compulsory mediation held promptly after the dispute arises, allowing the parties to try to work out their differences?  What about allowing the parties to make a post-dispute decision to utilize an informal consumer court that conducts hearings in the evening or on the weekend, and promptly issues a binding judgment for parties who agreed to use it?  Could we create a less expensive, truly voluntary, form of arbitration?  Or, maybe trade associations could form tribunals to resolve disputes, settling claims through a common fund.  Like worker’s compensation, members’ fees could be based on the past history of complaints.  Finally, how about authorizing designated consumer organizations to act as “private attorney generals,” and maintain litigation on behalf of aggrieved consumers, limiting relief to restitution or repair?

Alternatives to our current form of ADR do exist, and should be considered. Can they work?  To see a truly innovative way of dispute resolution, take a look at the Tokyo Tuna Court, discussed in Eric Feldman’s article, The Tuna Court: Law and Norms in the World's Premier Fish Market, 94 Cal. L. Rev. 313 (2006) (describing how "Tokyo's tuna merchants make use of a highly specialized court created by the state--the Tuna Court--that follows formal rules and procedures that are contained in a government ordinance. The supposed disadvantages of legal rules are nowhere apparent. The Tuna Court is fast and inexpensive, and the process of articulating and resolving claims serves to strengthen individual relations and the cohesion of the market community.").

Comments

[Andrew Engel]

In the counties in which I practiced most, the Courts maintain its own full-time (and a couple more part-time), fully trained mediators. The judge will refer many cases to mediation early in the process, often before significant discovery has occurred. I have had very good results in mediations conducted in these Courts. It would permit me to resolve the case quickly and minimize my fees. That made everyone (especially the defendant) feel better about settling.

Also, one local Court has a mandatory arbitration process for most smaller claims (under $50,000). The Court can order any case (with a few exceptions) to arbitration. The arbitration is held reasonably early in the process. After an award is made, either party may appeal, within 30 days, from the award. If an appeal is taken, the case is placed back on the courts docket and matter proceeds to trial. (I think there may be a penalty of some kind if the court ordered award was not at least a certain percent higher than the arbitration awward. This was to discourage taking marginal cases to trial.)

In this process, the arbitrators are all local attorney who have been trained. Many of them have several years of experience. Most view serving on arbitrations panels as a duty to court and the public. Each arbitrator gets paid between $150.00 and 400.00 depending on the length of the arbitraion. But it is NOT private arbitration.

The courts instituted these rules as docket-clearing tools. But they seem to work well for the parties.